Thomas Flexible Coupling Co. v. Commissioner
United States Tax Court
1. Petitioner is a corporation, engaged in the business of manufacturing and selling flexible couplings. For the years 1942, 1943, and 1944 petitioner, pursuant to an agreement of November 26, 1939, and a supplemental agreement of November 26, 1943, made payments designated as royalties on patents to one of its stockholders. This stockholder, together with her husband, president of petitioner, controlled the majority of petitioner's stock.
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1. Petitioner is a corporation, engaged in the business of manufacturing and selling flexible couplings. For the years 1942, 1943, and 1944 petitioner, pursuant to an agreement of November 26, 1939, and a supplemental agreement of November 26, 1943, made payments designated as royalties on patents to one of its stockholders. This stockholder, together with her husband, president of petitioner, controlled the majority of petitioner's stock. The decision in Thomas Flexible Coupling Co. v. Commissioner, 158 Fed. (2d) 828, affirmed our decisions denying the deduction of similar payments made in…
1Opinion of the Court
OPINION.
Blace, Judge:
The first issue in these proceedings for our decision is whether certain “royalty” payments made by petitioner to Bertha E. Thomas are allowable deductions from petitioner’s gross income under section 23 (a) (1) (A) of the Internal Revenue Code.1
In our findings of fact we have summarized the litigation concerning the deduction of similar payments for the years 1939, 1940, and 1941. Respondent contends that the same issue is involved in the present proceedings as was litigated in the prior proceedings; that, a court of competent jurisdiction having passed on this issue,…
2Cases cited4 opinions
- Commissioner v. SunnenSupreme Court of the United States · 1948
- Blair v. CommissionerSupreme Court of the United States · 1937
- Freuler v. HelveringSupreme Court of the United States · 1934
- Wall Products, Inc. v. CommissionerUnited States Tax Court · 1948
3Cited by16 opinions
- Fairmont Aluminum Co. v. CommissionerUnited States Tax Court · 1954
- Differential Steel Car Co. v. Comm'rUnited States Tax Court · 1951
- Straight Trust v. CommissionerUnited States Tax Court · 1955
- Best Lock Corp. v. CommissionerUnited States Tax Court · 1959
- Commissioner of Internal Revenue v. Thomas Flexible Coupling CoCourt of Appeals for the Third Circuit · 1952
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